Financial Ombudsman Service chief executive Caroline Wayman has hit out at the “outrageous” uphold rates from complaints against insurers.
Speaking to the Treasury select committee yesterday, Wayman said it was wrong the FOS upheld complaints against insurers in half of cases even after firms have had the chance to put it right.
Wayman, who took the helm at the FOS in July, also said she was working hard to improve the reputation of the organisation with advisers.
She said: “Not that long ago I was at an event where an insurer was saying it is outrageous because half the cases are found for us so that means in half the cases the claims are frivolous. No, it means that we found in their favour by the time it came to us.
“I actually think it is a little bit outrageous that in a market where nothing much is happening then still in half the cases we are needing to say ‘you have done that wrong’ even after they have had the chance to put it right.
“People use the phrase ‘vexatious’, and this happens in payment protection insurance too, when what they mean is someone saying something has gone wrong and the business doesn’t agree. That is not the same as vexatious.”
She added: “For a case to be frivolous and vexatious is a pretty high bar. It is not that you don’t win, it’s that you just don’t have a case and the courts have a similar test.”
Wayman was also quizzed by TSC member and Conservative MP Mark Garnier over how the FOS is negatively seen by advisers.
When asked if it worried her, Wayman said: “Yes, because I would prefer for them not to be feeling like that and to have satisfaction. I understand some of the reasons for that and we have done various things to try and deal with it.
“There are concerns about the cost of regulation and the cost of bringing cases to us so we have increased the number of free cases to 25. It costs £550 and it used to be three so that lifts the vast majority of small businesses out of paying for cases.”
Wayman highlighted FOS roadshows where advisers could meet ombudsmen and ask them questions as an example of engagement.